Employment Law

January

• Holiday pay– regulations come into force placing a two year limit on claims for unfair reduction from wages claims in respect of holiday pay – will apply to claims presented on or after 1 July 2015.

March

• Data Protection: It is now a criminal offense for employers to force job applicants and employees to obtain and provide a copy of their criminal record by means of a subject access request under the Data Protection Act 1998 (DPA).  The new offense applies to employees, prospective employees, and contractors.  The new law does not prevent employers from using the formal criminal record check system (the Disclosure and Barring Service) to verify an individual’s criminal history if permitted to do

April

• Shared parental leave takes effect for parents whose babies are due on or after 5 April or who have children placed for adoption on or after that date. 
• Adoption rights- the 26 week qualifying period for adoption leave will be removed and statutory adoption pay will be brought in to line with statutory maternity pay; adopters will also be able to take paid time off for some 'adoption appointments'.
• Compensation limits:
• The standard weekly rates of SMP, SAP, ShPP and statutory paternity pay (SPP) will increase from £138.18 to £139.58 per week;
• The maximum amount of a week’s pay for the purposes of calculating statutory redundancy payments will increase from £464 to £475;
• The standard weekly rate of statutory sick pay (SSP) will increase from £87.55 to £88.45 per week;
• The lower earnings limit applying to National Insurance contributions, below which employees are not entitled to SSP, SMP, SAP, SPP and ShPP, will increase from £111.00 to £112.00 per week.
• Parental Leave: The current unpaid parental leave regime will be extended to cover parents of children aged between five and 18. At the moment, eligible parents are entitled to take up to 18 weeks of unpaid parental leave up until either the child’s 5th birthday, or the fifth anniversary of the date of placement of the child for adoption. This limitation on unpaid parental leave will be removed so as to permit the leave to be taken at any time before the child’s 18th birthday.
• Wearing Turbans in the Workplace:  The Deregulation Bill granted Royal Assent on 26^th March 2015 now extends the exemption for turban wearing Sikhs to all workplaces, there will still be very limited exceptions, such as for specific roles in the armed forces and emergency response situations.  The change further provides protection for employers by extending the limitation on liability for employers in the construction industry to any work situation where a turban-wearing Sikh chooses not to wear a safety helmet. 
• Immigration:Various changes to the Immigration Rules for individuals coming to the UK from outside the EU now apply. These include the waiver of the Tier 2 'cooling off period' where the period of time in the UK is three months or less, the simplification of existing rules for visitors, the update of annual minimum salary thresholds for Tier 2 and appropriate salary rates for individual occupations, and the addition of certain professions onto the shortage occupation list.
• Construction (Design and Management) Regulations 2015: 9 key changes came into force applying to:
  - the whole construction process on all construction projects, from concept to completion;
  - what each dutyholder must or should do to comply with the law to ensure projects are carried out in a way that secures health and safety.

In October

• National Minimum Wage ratesare will increase from 1 October:
• the adult rate will increase by 20 pence to £6.70 per hour
• the rate for 18 to 20 year olds will increase by 17 pence to £5.30 per hour
• the rate for 16 to 17 year olds will increase by 8 pence to £3.87 per hour
• the apprentice rate will increase by 57 pence to £3.30 per hour

Employment-related Acts and Bills

• The Small Business, Enterprise and Employment Bill was introduced to Parliament in June 2014. It contains provisions to define a 'zero hours contract' and prevent use of exclusivity clauses, set a maximum penalty for underpaying the national minimum wage on a per worker basis rather than per notice, penalise employers who do not pay an employment tribunal award, limit employment tribunal postponements, and introduce annual reporting on whistleblowing disclosures.

Consultations and their outcomes

• Simplifying recruitment legislation– following a consultation on agency workers legislation in 2013, the Government indicated that it intends to change the existing legislation. A further consultation closed in September 2014. Another consultation looks at introducing legislation preventing employment agencies and employment businesses from advertising jobs exclusively in other European Economic Area countries without advertising in Great Britain.
• Employment status- A wide-ranging Government review was announced in October 2014 with recommendations expected by March 2015.
• Caste discrimination- a consultation is expected on introducing caste as an aspect of race under Equality Act 2010.

In this article we look at the potential impact of the recent ruling on Holiday Pay calculations.

Earlier this year it was ruled that holiday pay must be calculated to take commission into account, so that employees / workers who usually earn commission are not disadvantaged by taking annual leave.  An Employment Appeal Tribunal has now held that holiday pay must correspond to the pay that the employee / worker normally receives (this includes "non-guaranteed" overtime and other allowances that are "intrinsically linked to the performance of the tasks").  However, this holiday pay calculation only applies to ‘Statutory Leave’ under the Working Time Directive i.e. the first 20 days of any holiday entitlement and not the additional 8 days holiday nor any additional contractual holiday given.

If you require your employees / workers to work non-guaranteed overtime (or if you pay commission and other allowances) it is likely you will have to increase holiday pay in future to reflect these payments. Employees / workers may also put in backdated claims for additional payments, the period for which they can claim is restricted as claims for arrears of holiday pay will be out of time if there has been a break of more than three months between underpayments.

At the moment though there are still a number of aspects that remain unclear: 

• it would appear that payment for overtime that is entirely voluntary is not included.  The ruling only applies to overtime where the employee / worker must work it if requested to do so;

• the reference period for calculating average pay is not determined.  Whilst a 12 week period is the most likely, this may not be the case;

• leave was granted to appeal to the Court of Appeal and an appeal is highly likely, as such the situation may change.

Given the above points, we recommend that at the moment you do not make any payments until more is known.  However there are a few things you can do in terms of reviewing your contractual obligations and working practices to reduce the likely impact of the ruling going forward:

• review your wording on overtime and remove any "requirement" to work this if in practice this is always worked on a voluntary basis.

• if you require employees to work regular overtime you could reduce your payments by building more flexibility into your contracts e.g. if the workload has peaks and troughs build in the right to insist on time off in lieu rather than paid overtime

In terms of preparing for future payments;

• ensure your record keeping of working time and overtime is accurate;

• consider whether you will want to retain a "two-tier" holiday pay arrangement i.e. having the first 20 days paid at a higher rate than the remaining days.  If you do, check whether your payroll system will be able to cope with calculating holiday pay in different ways.

If you want to assess the potential financial impact for your business you could:

• calculate the amount of overtime, commission and other regular allowances that have been paid to your employees / workers over the past year; then assess the effect of an increase in holiday pay if these are factored into the calculation for the first 20 days of each relevant employees / workers holiday pay each year; 

• look at when holiday tends to be taken.  This will help you to identify the period over which potential liabilities might extend. Do not dispose of your holiday records for previous years as these may help to establish which leave forms part of the first 20 days, and which does not, and therefore where any breaks in the sequence of underpayments occur;

• Employees / workers who have left more than 3 months ago may not make a claim.

Implemented Changes

1) January 2014: Changes to TUPE

The changes include the following:

·         The current rules relating to service provision changes will remain. However, the legislation will clarify that for TUPE to apply to a service provision change, the activities carried on after the change must be ‘fundamentally or essentially the same’ as those carried on before it; and

·         The obligation to provide employee liability information will remain, but the required information will need to be given 28 days rather than 14 days before the transfer as is currently the case; and

·         Change of work place location will be an Economic, Technical or Organisational (ETO) reason, thereby meaning genuine place of work redundancies will no longer run the risk of being automatically unfair; and

·         The provisions restricting changes to terms and giving protection against dismissal will no longer apply to changes made for “transfer-related reasons”; and

·         Micro-businesses will be allowed to inform and consult with their employees directly where there is no recognised independent union or existing appropriate representatives

2) April 2014: Introduction of mandatory pre-claim ACAS conciliation

This will require potential claimants in employment tribunal proceedings to lodge details of their proposed claim with ACAS in the first instance before bringing a claim.  At this point, ACAS will contact the parties, offering them the opportunity to engage in pre-claim early conciliation (EC) with a nominated conciliation officer for a prescribed period of a month.

If either party refuses EC, or it is unsuccessful (for example if a settlement has not been reached within the prescribed period), the claimant will be issued with a certificate by ACAS enabling them to proceed with issuing proceedings in the tribunal. If, however, the parties do agree to enter into EC at this pre-litigation stage, this will effectively "stop the clock" on the limitation period for presenting the claim to the tribunal whilst this takes place.

3) April 2014: Abolition of Discrimination questionnaires

Section 138 of the Equality Act is to be repealed, abolishing discrimination questionnaires, which enabled an individual to obtain information from their employer regarding discrimination and to use the information obtained as evidence in tribunal proceedings.  ACAS guidance has been issued.

4) April 2014: Increase in statutory pay rates

The basic rates of maternity allowance and statutory maternity pay (SMP), statutory paternity pay (SPP) and statutory adoption pay (SAP) all increased from £136.78 to £138.18.

5) pril 2014: Changes to Statutory Sick Pay

The rates of statutory sick pay (SPP) increased from £86.70 to £87.55. The Percentage Threshold Scheme, which allowed employers to reclaim statutory sick pay in certain circumstances, was abolished.

6) April 2014: Imposition of financial penalties on employers who lose in the employment tribunal

Tribunals now have a discretionary power to impose a financial penalty on employers who lose at tribunal where the breach of employment rights has one or more aggravating features.  If the tribunal decides to exercise its discretion to make such an award, the amount of the penalty will be 50% of any financial award.  The penalty will be subject to a minimum threshold of £100 and an upper ceiling of £5,000.  Where a non-financial award is made, the tribunal will be able to apply a monetary value.  Employers will qualify for a reduction of 50% if they pay the penalty within 21 days. 

7) April 2014: Regulation Freeze

The regulation freeze was extended to businesses with fewer than 50 employees, These businesses are exempted from new regulations if there is any evidence that they will result in disproportionate burdens that could impede growth. Applies to new regulations which come into force after 31 March 2014.

8) June 2014: Extension of right to request flexible working

The right to request flexible working will be extended to all employees with 26 weeks' service. Currently, this right is only afforded to employees who qualify as parents or carers.  Employers will also no longer be required to follow the existing statutory procedure in dealing with flexible working requests. Instead they must consider all such requests in a ‘reasonable manner’.  A statutory code of practice is introduced to give guidance to employers as to the meaning of ‘reasonable’.  Employers will have the right to refuse requests on business grounds.

9) October 2014: Increase in Minimum Wages rates

The rate for 21-year-olds and over will increase by 19p an hour to £6.50.

The rate for 18 to 20-year-olds will increase by 10p to £5.13.

The rate for those aged 16 and 17 will increase by 7p to £3.79.

Apprentices will earn an extra 5p an hour, taking their wages to at least £2.73.

10) October 2014: Shared Parental Leave

The Shared Parental Leave Regulations 2014 apply to babies whose expected week of childbirth begins on or after 5 April 2015 . Employed mothers will still be entitled to 52 weeks of maternity leave, however, under the new regulations mothers can end their maternity leave after the initial two week recovery period and then both parents can decide on how they wish to share the remaining 50 weeks of leave (replacing Additional Paternity Leave and Pay).

11) October 2014: Army Reservists

The 'Territorial Army' has become the 'Army Reserve'.  Key changes that affect employers are:

- Employees are exempted from the 2 year qualifying period for making unfair dismissal claims where the reason or principal reason for dismissal is the employee’s reservist service;

- A new Government scheme rewards SME’s with a monthly payment of up to £500 for each employee called up by the Army Reserve;

- The maximum period of mobilisation of reservists is standardised at 12 months;

- Army reserve training commitment is increased to around 40 days per year, up from a current average of 3.

12) December 2014: Shared Parental Leave

Regulations introducing the new scheme of shared parental leave came into force on 1 December. These will affect parents whose babies are due on or after 5 April 2015, or children placed for adoption on or after that date.

The draft Employment Tribunals and Employment Appeal Tribunal Fees Order 2013 dealing with employment tribunal fees has been laid before Parliament.  There will now be a £250 issue fee and a £950 hearing fee for most types of single claim (including unfair dismissal, discrimination and whistleblowing).  Straightforward single claims (such as unlawful deductions from wages and statutory redundancy payments) carry a lower fee (£160 issue fee and £230 hearing fee). For multiple claims, the fees are higher.

Only a claim made to an employment tribunal or appeal lodged with the EAT on or after the implementation date (currently expected to be at the end of July 2013) will attract fees, any existing claim or appeal prior to that date will not attract any fee payments.  The following information is also confirmed:

• Fees are paid at issue and before hearing, and also for several specified applications in the employment tribunal (there are a further five fees for certain applications once a claim has been accepted, such as an application to dismiss following settlement or to issue a counterclaim);
• The party that seeks the order initially pays the fees (i.e the claimant pays the issue and hearing fee but the respondent will pay fees for any applications they make);
• Fees are payable in advance;
• If a claimant lodges a claim with a number of different types of complaint, the fee payable will be that which relates to the highest level claim;
• The civil courts fee remission system will be extended to protect access to the tribunal for those who cannot afford to pay a fee;
• The fee to lodge an appeal in the EAT is £400 and £1,200 for it to progress to hearing and a failure to pay, or prove eligibility for remission, will result in the discontinuation of the appeal;
• The employment tribunal and EAT rules of procedure will be amended to allow tribunals to order an unsuccessful party to reimburse the fees paid by the successful party.

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The company in question introduced a “zero-tolerance” policy in respect of alcohol and illegal drugs, stating that they were forbidden on the premises, could not be consumed during the working day, and employees would be suspended for being under the influence of them.  Sometime later, it stated it would carry out drug testing for all staff and that a positive result or failure to comply with a request for a test could lead to dismissal for gross misconduct.

An employee raised concerns to HR that he smoked cannabis on a regular basis outside work to reduce stress. One day whilst in work, he realised he was too ill to continue working and started to leave but was told that the drug testing was taking place that day and was requested to undergo a test before leaving. He refused to take the test, for a variety of reasons, including that he knew the test would be positive (because he believed that cannabis stays in a person’s system for 45 days after use), and that the Health and Safety Executive states that the right to drug test must be in the employment contract.  He was dismissed for failing to comply with the request for a drug test, and his appeal failed. He claimed unfair dismissal.

The tribunal found that the company had acted unreasonably in failing to consult employees regarding drug testing, and it had not taken adequate steps to address the employee’s concerns. For example, although the company was informed by the drug testing provider that cannabis remains in a person’s system for only three days after use, it failed to pass this information on to the employee, despite knowing that his misunderstanding was a key reason for his refusal to take the test. The tribunal noted that the company also failed to take any steps to assist the employee to “get clean” after he had informed it that he smoked cannabis, and found that a reasonable employer would have considered offering help or counselling when consulting on the introduction of such a draconian policy. The tribunal held that the employees dismissal was unfair and that, given the company’s unreasonable behaviour, his behaviour had not contributed to it.

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A recent employment  law case serves as a reminder for employers not to treat a criminal conviction as an automatic reason for dismissal.  

An employment tribunal found that a long serving employee was unfairly dismissed from his NHS post as a mental health worker working with vulnerable adults.  The employee had been found guilty of two relatively minor criminal convictions, possession of cannabis and possession of an illegal firearm.  These convictions came about as a result of the police finding a small quantity of cannabis and an air rifle at the employees home.  The employee pleaded guilty to both offences resulting in an absolute discharge for the cannabis possession and a £200 fine for having the illegal firearm.

Throughout the disciplinary process the employee maintained that he did not take drugs and the cannabis was not his. The outcome of the disciplinary hearing was dismissal, on the basis that the charge was of a "serious nature" and that the employer had lost trust in the employee to work with vulnerable adults.  The subsequent appeal hearing agreed that the convictions were serious enough to warrant dismissal.

The tribunal found that, while the employer had a potentially fair reason to decide to dismiss, they had been wrong to treat the criminal convictions as inevitably resulting in dismissal. This approach was contrary to the employer's policy on criminal convictions, which emphasised the importance of not deferring to the criminal process and making a decision depending on all the surrounding circumstances.  The tribunal stressed that an employer cannot relinquish its obligations to dismiss fairly by leaving matters to the criminal court.  The tribunal noted that the employee had put forward some convincing mitigating factors during the disciplinary process including:

• being open, honest and consistent with the employer about the offences throughout;
• offering to do a drugs test which was refused by the employer;
• a previous good record; and
• there was no evidence that the conviction had caused any damage to the employer's reputation, for example through bad publicity.

The tribunal noted that the employer had not made any effort to establish whether or not it accepted the employees version of events and consequently whether or not this made any difference to the decision.  In particular, the employer failed to set out how these convictions made the employee unsuitable to continue in role. 

In terms of employment law and good HR practice, policies on criminal convictions should allow a degree of flexibility about whether or not an offence merits dismissal. A guilty plea in the courts is not an automatically fair reason for dismissal.  You may have a good reason to dismiss a convicted employee who works in a sensitive post, but you should still ensure your managers go through and record the thought process that leads to dismissal.

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Implemented Changes

1) February 2013: New compensation limits

The limits applying to certain awards of employment tribunals and to other amounts payable under employment legislation have changed with the main changes being:

·      Maximum amount of a ‘week’s pay’ for the purpose of calculating a redundancy payment or the basic or additional award of compensation for unfair dismissal or payments to employees in the event of insolvency to increase from £430 to £450.

·       Limit on the amount of compensatory award for unfair dismissal to increase from £72,300 to £74,200.

·       Limit on the daily amount of statutory guarantee payment to increase from £23.50 to £24.20.

The increases apply where the event giving rise to the entitlement to compensation or other payment occurs on or after 1 February 2013. The date is determined differently depending on the type of claim brought. In unfair dismissal claims, this date is the effective date of termination of employment. In guarantee payment claims, it is the day in respect of which the payment is due.

2) March 2013: Unpaid Parental Leave

New rates for Statutory Sick Pay (SSP), Statutory Maternity Pay (SMP), Ordinary Statutory Paternity Pay (OSPP), Additional Statutory Paternity Pay (ASPP) and Statutory Adoption Pay (SAP) have been announced for the tax year 2013/14 as follows:

·      The standard weekly rate of SMP and the weekly rates of OSPP, ASPP and SAP will increase from £135.45 to £136.78;

·      The prescribed weekly rate of Maternity Allowance will also increase from £135.45 to £136.78;

·      The weekly rate of SSP will increase from £85.85 to £86.70;

·      The lower earnings limit applying to National Insurance contributions, below which employees are not entitled to SSP, SMP, OSPP, ASPP and SAP, will increase from £107 to £109 per week.

4) April 2013: Reduction to the collective redundancy consultation period

·      Where 100 or more redundancies are proposed at one establishment within a 90-day period, consultation must begin at least 45 days before the first dismissal takes effect (that is, when the contract of employment is terminated).

·       No change to where 20 to 99 redundancies are proposed at one establishment within a 90-day period i.e.consultation must begin at least 30 days before the first dismissal takes effect (that is, when the contract of employment is terminated).

In addition, it will legislate to make clear that fixed-term contracts which have reached the end of their natural life are excluded from collective redundancy consultation obligations.

5) June 2013: Whistleblowing

The changes are summarised below:

a. Employers can be held to be vicariously liable if workers victimise a colleague who has blown the whistle.

b. Where a worker ‘blows the whistle’ they will only now be protected if they can prove that the disclosure was made "in the public interest".

c. The disclosure no longer needs to be made in ‘good faith’.

d. Tribunals will have the power to reduce the worker's compensation by up to 25% if it is proved that the disclosure was not made by him or her in good faith.

6) July 2013: Employment Tribunals and Employment Appeal Tribunal Fees

-     Sanctions for non-payment of fees

-     An initial sift stage at which every case will be reviewed by an Employment Judge on paper to confirm there are arguable complaints and defences within the tribunal’s jurisdiction and give case management orders. 

-     Removal of the £20,000 limit on costs that can be awarded by a tribunal and more flexibility in making deposit orders.

-     A rule expressly permitting Tribunals to limit oral evidence and submissions at hearings. 

-     Non-prescriptive guidance from the Presidents of Employment Tribunals in England and Wales and Scotland to supplement the new rules and aid consistency of approach.

-     A less rigid approach to applications to extend time to respond to a claim

-     Shorter time limit for employer contract claims

-     A slightly more flexible regime on private hearings, restricted reporting and anonymity.

-     Making it easier to dismiss withdrawn claims.

-     A more flexible regime for reconsidering judgments.

-     An emphasis on cooperation by the parties.

-     Changes in terminology: “preliminary hearings” will take the place of pre-hearing reviews (PHRs) and case management discussions (CMDs).

-     A mandate to encourage mediation and settlement.

7) Oct 13: Changes to minimum wage rates

The following are in force from 1 October 2013:

·        The adult rate increases by 12p from £6.19 to £6.31 per hour.

·        The rate for 18-20 year olds increases by 5p from £4.98 to £5.03 per hour.

·        The rate for 16-17 year olds increases by 4p from £3.68 to £3.72 per hour.

·        The apprentice rate increases by 3p from £2.65 to £2.68 per hour.

8) Growth and Infrastructure Act 2013

The Growth and Infrastructure Bill received Royal Assent on 25 April 2013 to become the Growth and Infrastructure Act 2013.  In return for shares (with a minimum value of £2,000 and subject to a maximum £50,000 exemption from capital gains tax), employee shareholders will give up certain employment rights including unfair dismissal, rights to request flexible working and statutory redundancy pay. They will also need to give longer notice to return from maternity, paternity or adoption leave.

However a number of modifications have been announced to the original proposals including:

·      Employers must issue a written statement of the particulars of the status of employee-shareholder, specifying the employment law rights that the employee is giving up and setting out the details of the shares being offered and the rights and restrictions they carry (including whether they are voting or non-voting shares, whether they carry a dividend, whether they can be bought back or redeemed, whether they can be freely sold and whether certain other rights and restrictions are attached to them). This will be in addition to the written statement of employment particulars already required by section 1 of the Employment Rights Act 1996.

·      There will be a seven day ‘cooling off’ period during which any acceptance of an employee-shareholder contract will not be binding and will have no legal effect.

·      An agreement that someone shall become an employee-shareholder is invalid unless, prior to entering into the contract, the individual has received advice from a relevant independent advisor (i.e. a solicitor, a barrister, a fellow of the Institute of Legal Executives employed by a solicitors’ practice, a certified trade union official or a certified adviser in an advice centre) as to the terms and effect of entering into the agreement. Further, the employer has to pay the ‘reasonable costs’ of that advice (even if the individual decides not to take up the job offer) if they would otherwise have been payable by the employee. If the employee does not receive independent advice before agreeing to become an employee shareholder, then they will be an ordinary employee and the agreement will have no effect in removing their employment rights.

·      Jobseekers will not forfeit their jobseekers' allowance (JSA) if they do not want to accept an employee-shareholder contract and guidance for Jobcentre advisers will make clear that a jobseeker cannot be mandated to apply for an employee- shareholder job.

·      The first £2,000 of shares will not attract income tax.

·      Existing employees will be protected from detriment or dismissal if they refuse to switch to an employee-shareholder contract.

The Government has announced plans for more employment law reform to allow parents to share up to a year's leave after the birth of a child.  The Government views the current arrangements as old-fashioned, inflexible and gender-biased, stating that everyone should have the right to choose how they balance their work and family commitments.  

Under the new system, parents will be able to choose how they share the care of their child.  Mothers will still be able to take a maximum of 52 weeks of leave after the birth of the child  However, the changes will allow mothers to be able to start ‘flexible leave’ at any point after the first two weeks of the birth giving Parents much greater flexibility about how they ‘mix and match’ their leave.  They may take it in turns or take it together, providing it is not more than 52 weeks in total.

The plan is to introduce the changes to flexible working in 2014 and to flexible parental leave in 2015.  It will mean every business will now have to be aware of, and monitor, leave and flexible working much more closely.

The Governments view the planned reform as good news not only for parents and parents-to-be, but employers too who will benefit from a much more flexible and motivated workforce. 

Do you agree, or will it create another administrative burden especially for the small business? 

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Under the Equality Act 2010 employers have a positive duty to make reasonable adjustments to their premises or their employees’ working arrangements to ensure that a disabled employee or a disabled job applicant is not put at a substantial disadvantage when compared with a non disabled person.  Failure to make such reasonable adjustments may result in claims being brought against the employer for disability discrimination. 

However, in a recent Employment Appeal Tribunal (EAT) case (Cordell (Ms C) v Foreign and Commonwealth Office (FCO)) it was held that, in principal, an employer can refuse to make adjustments on the basis of costs alone.

Ms C worked in the FCO’s Poland office and was profoundly deaf requiring the assistance of a team of lip-speakers whilst at work.  The lip-speakers were based in the UK and each individual would work for two weeks at a time in Poland.  The cost of providing the lip-speakers, including airfares and accommodation, was approximately £146k a year.

Ms C was offered a promotion, which involved moving to the FCO’s Kazakhstan office.  The FCO had a Reasonable Adjustments Policy where adjustments costing over £10k were subject to a specific procedure to assess whether they were in fact reasonable.  It emerged that providing the same level of lip-speaking assistance for Ms C in Kazakhstan would cost significantly more so the FCO revoked its offer of promotion, concluding that the cost of the adjustment was unreasonable.  Ms C brought an Employment Tribunal claim for breach of the duty to make reasonable adjustments.

The Tribunal held that the FCO had not breached its duty to make reasonable adjustments.  It concluded that the costs of making the adjustments would be in the region of £249k per annum and were therefore unreasonable.  The Tribunal concluded that its decision would “impose some limitations on the sort of posting the Claimant can expect in the future but on any objective test the cost of the agreed adjustments was simply unreasonable.”

The Tribunal took the following factors into account when reaching its decision:

•   The annual cost of the adjustment would equate to five times the salary of Ms C, more than the entire annual cost of employing local staff at the embassy and not far behind the salaries of all the diplomats at the embassy in Kazakhstan.

•   The cost would take up nearly half of the FCO’s disability budget.

•   The annual cost exceeded the cost of adjustments in Poland by over £100k and in London by around £180k.

Ms C appealed the decision but the EAT dismissed her appeal, indicating that although it was very sympathetic to her situation, the law did not require the FCO to compensate for Ms C’s misfortune “at whatever cost”.  The EAT indicated that the factors considered by the Tribunal were an entirely legitimate way of putting the costs into context.  The EAT went on to say that, when making decisions on reasonableness, Tribunals could consider factors including:

•    the size of any budget dedicated to reasonable adjustments;

•    what the employer has chosen to spend in what might be thought to be comparable situations;

•    what other employers are prepared to spend; and

•    any collective agreement or other indication of what level of expenditure is regarded as appropriate by representative organisations.

The EAT concluded however that considering these factors can only help up to a certain point and ultimately there is “no objective measure for calibrating the value of one kind of expenditure against another”.  As such, the EAT held that, when considering whether the cost of an adjustment is reasonable or not, it is up to the Tribunal making a judgement as to what it considers to be “right and just”.

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A recent Supreme Court ruling had again raised confusion over retirement law and age discrimination.  Since the mandatory retirement age was abolished uncertainty has remained with many employers still unclear and wary of how to deal with issues arising out of this.

The latest ruling (in the Leslie Seldon vs Clarkson, Wright & Jakes law firm) says employers are within their rights to dismiss older workers as long as they have a "public interest" defence (e.g. making way for more entry-level jobs and younger staff climbing the career ladder, deemed to be in the public interest at a time of high young unemployment).

But the ruling only said it was acceptable for the law firm to force its partner, Leslie Seldon, to retire – but not that it was right to make him leave aged 65.  The ruling said it is possible to justify a retirement age, but not necessarily a retirement age of 65.  The case is going back to tribunal for clarity on this point – don’t hold your breath for a quick decision!

So for the time being, uncertainty still reigns and not a lot has changed since we published our previous blog ‘Abolition of the Default Retirement Age – How to stay within the law’

(refer to http://www.connectivehr.co.uk/blog/default-retirement-age ).

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